Crony capitalism targeted after book release, recent reports

Published: Tuesday, Nov. 29 2011 12:00 a.m. MST

According to the Washington Post, Schweizer's book also reports that Rep. Shelley Capito, R-W.V., and Jim Moran, D-Va., as well as at least 10 senators including John Kerry, D-Mass., Sheldon Whitehouse, D-R.I., and Dick Durbin, D-Ill., traded stock or mutual funds related to the financial industry after receiving briefings.

Bachus pushed back against claims that he engaged in insider trading, writing in a letter to the book's publisher that the claims against him were "absolutely false and incorrect." He also said he has a "personal policy" of not investing in financial companies because of his committee position, The Hill reports.

Pelosi spokesman Drew Hammill told The Daily Beast that the controversy is a "preposterous idea" cooked up by a "right-wing hack." Boehner told 60 Minutes that he has not made decisions on day-to-day trading activities in his account, and that he hasn't for years.

Sen. Scott Brown, R-Mass., has filed a bill called the Stop Trading on Congressional Knowledge (STOCK) Act, which would make it illegal for Congressional officials and their staffs to use private information about pending bills to make investment decisions. Brown's bill currently has six cosponsors, including Sens. Roy Blunt, R-Mo., Saxby Chambliss, R-Ga., Susan Collins, R-Maine, Dean Heller, R-Nev., Marco Rubio, R-Fla., and Olympia Snow, R-Maine.

In the House, Rep. Timothy Walz introduced a STOCK Act in March, which gained little attention until the 60 Minutes special aired. Within a week of the report, it gained more than 80 cosponsors. Rep. Jim Matheson, D-Utah, is a cosponsor. According to Thomas.gov, Reps. Jason Chaffetz and Rep. Rob Bishop are not currently cosponsors.

In addition to discussing possible Congressional insider trading, Schweizer's book also examines Obama campaign backers and bundlers. In the Department of Energy 1705 government-backed-loan program, which focused on alternative-energy projects, Schweizer writes that $16.4 billion of the $20.5 billion in loans granted as of Sept. 15 went to companies either run by or primarily owned by Obama financial backers. The Department of Energy's inspector general testified that the contracts were steered to "friends and family."

The most well known of the 1705 loans went to Solyndra, the solar panel company that went bankrupt after being awarded a $535 million U.S. loan guarantee. Prior to going bankrupt, Solyndra's loan was restructured to allow private investors to be repaid before U.S. taxpayers. Argonaut Ventures, an investor, has ties to George Kaiser, an Obama campaign contribute. However, Energy Secretary Steven Chu said Kaiser did not influence him in giving or restructuring the loan.

"These programs might be the greatest — and most expensive — example of crony capitalism in American history," Schweizer writes at The Daily Beast. "Tens of billions of dollars went to firms controlled or owned by fundraisers, bundlers and political allies, many of whom — surprise! — are now raising money for Obama again."

The Richmond Times-Dispatch lists a number of companies with ties to the Obama administration — companies that received loan guarantees and government grants — and writes that "principled conservatives" should have spoken up against crony capitalism during the Bush administration, and "principled liberals" should speak up now.

The Energy Department's inspector general has also launched more than 100 criminal investigations related to the 2009 stimulus, Politico reports. The investigations have purportedly involved the submission of false information, claims for unallowable or unauthorized expenses and other improper uses of stimulus funds.

"The whole idea of the federal government investing in these companies, particularly when there's such a connection with Democratic fund-raisers, leaves a very bad taste in people's minds and suggests a pattern of crony capitalism," Mitt Romney said during an interview with Fox's Neil Cavuto. "That's something which American simply can't stand for."

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